Russia’s Finance Ministry Says Crypto Regulations are Needed

The Ministry of Finance in Russia is moving ahead with their plan of regulation of cryptocurrencies in the country. They have now introduced a bill in the parliament for doing so. On Monday, a press release was published, which disclosed that the bill had been presented on February 18th. This bill is based on the roadmap that have been approved previously, after it was drafted by a number of government bodies, including law-enforcement agencies in Russia. The announcement of the bill also highlighted the disagreement with the Bank of Russia, which is against the regulation of crypto and wants to impose a blanket ban on the digital currencies, along with trading and mining activities.

The central bank in Russia has instead been pushing their pilot program of a central bank digital currency (CBDC), which is termed digital ruble. The bank has suggested that businesses dealing with crypto issuance and trading should be punished with fines of about 500,000 rubles i.e. $6,360 be imposed on people and 1 million rubles on companies. The Ministry of Finance mentioned in the press release that they would consider the objections of the Bank of Russia in further working of the bill, as long as they don’t contradict the approach of the Ministry of Finance.

However, they have not yet disclosed the official text of the bill. The legislation considers crypto as an investment tool, rather than legal tender and notes that crypto cannot be used for payment of goods and services. The bill also mentions requirements for crypto exchanges as well as over-the-counter desks. These will have to satisfy a particular criteria in order to get the license needed for providing their services and be added to a dedicated government register. Likewise, foreign crypto exchanges operating in Russia will also have to register legal entities in the country in order to offer their services to citizens.

Bank accounts would have to be used for conducting all crypto-to-fiat transactions and the press release further revealed that users would have to comply with Know-your-customer (KYC) protocols with crypto exchanges and banks alike. Furthermore, exchanges would also be required to inform their clients of the risks of crypto investment. Investors would be required to clear online tests for ensuring they have enough knowledge about crypto and the risks associated with them. Anyone who manages to clear the test will be able to invest about 600,000 rubles annually.

Those who do not qualify will only be permitted to invest 50,000 rubles in a year. There will not be any limits for qualified investors. Moreover, crypto exchanges would also be required to maintain separate accounts for keeping users’ funds and their own crypto. Likewise, they would also have to keep a record of their clients’ crypto addresses. Users will not be held responsible for any of the exchange’s debt. The proposed bill also aims to regulate the practice of crypto mining. The press release said that dedicated government agencies would supervise crypto mining, but no further details were provided in this regard.